Chapter 2, Section 2.7.2 includes a discussion of the barriers to development and commercialization of technologies. Barriers to technology transfer vary according to the specific context from sector to sector and can manifest themselves differently in developed and developing countries, and in economies-in-transition (EITs). These barriers range from a lack of information; insufficient human capabilities; political and economic barriers (such as the lack of capital, high transaction costs, lack of full cost pricing, and trade and policy barriers); institutional and structural barriers; lack of understanding of local needs; business limitations (such as risk aversion in financial institutions); institutional limitations (such as insufficient legal protection); and inadequate environmental codes and standards.

3.4.3.4 Dynamics in developing countries and timing of technology deployment

National policies in developing countries necessarily focus on more fundamental priorities of development, such as poverty alleviation and providing basic living conditions for their populations, and it is unlikely that short-term national policies would be driven by environmental concerns. National policies driven by energy security concerns can, however, have strong alignment with climate goals. The success of policies that address short-term development concerns will determine the pace at which the quality of life in the developing and the developed world converges over the long term.

In the long term, the key drivers of technological change in developing countries will depend on three ‘changes’ that are simultaneous and inseparable within the context of development: exogenous behavioural changes or changes in social infrastructure; endogenous policies driven by ‘development goals’; and any induced change from climate policies (Shukla et al., 2006).